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SMSF

ASIC licensing rules for accountants ‘onerous, unnecessary’

There was never a solid enough reason to remove the accountants’ exemption and the current licensing regime for accountants is out of step with industry practice, according to some licensing consultants.

In the wake of the accountants’ exemption phase out — which allowed accountants to provide basic SMSF services without an Australian Financial Services Licence — new licensing options have been largely unpopular with accountants, particularly the limited licence.

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This is due, in part, to accountants and financial planners being bundled together by the regulators, when the services they provide in relation to SMSF advice in particular are often starkly different.

“There was no need to remove the accountants’ exemption. It is important to not group accountants who provide basic SMSF services with financial planners, irrespective if they are accountants,” principal of consulting firm Ariel & Associates Jeremy Danon told Accountants Daily.

“The latter already require a full AFSL. My accounting clients, and those who have contacted me seeking advice, do nothing more than provide financial advice in regard to a client’s particular structure taking into account tax planning — for example, comparing family trust, small company, sole trader, SMSF structures. Then they may handle the documentation required to create the SMSF,” he said.

Also speaking to Accountants Daily, director at Merit Wealth David Moss said accountants, fundamentally, are not interested in product pushing, which is one of the key drivers of some dealer groups’ desire to have authorised representatives on board.

He believes accountants are largely interested in providing structural and strategic advice, which means the AFSL regime creates an unnecessary compliance burden on accountants.

In addition, Mr Danon believes the battle to keep the accountants’ exemption was not hard fought enough by the major accounting bodies.

“In my opinion, they should have fought harder to scuttle the change in law,” he said.

Accountants Daily reported in early June that while interest in providing SMSF services is on the rise with accountants, the majority of accounting firms rate licensing as a low priority.

Of the respondents to The Bstar 2017/18 Accountants Research Report, 71 per cent rated their need to act on the issue of licensing as low.

Only 1,181 applications for limited AFSLs were made during the three-year transition period of July 2013 to July 2016.